David Prosser: A pension reform for the very well-off

Outlook The Government's announcement yesterday of new rules that will end the requirement for people with private pension funds to convert their savings into an income via an annuity by age 75 at the latest looks, at first sight, like a sensible cut to red tape.

The reality, however, is that this reform will be of use to only a tiny handful of very wealthy savers who can afford to continue taking investment risks with their pension funds during old age.

Moreover, while savers with annuities are unable to pass on pension funds to their heirs, those who avoid buying a guaranteed income will be able to do so, albeit subject to a tax charge. In other words, while this measure may be dressed up as pension reform, it is actually just another concession on inheritance for the wealthy.